Game Theory and International Enviromental Cooperation

Because there are no supranational institutions that can enforce international environmental agreements, and so countries must deal with each other directly over such matters as global emissions, Finus (U. of Hagen, Germany) finds game theory particularly suited for analyzing international environmental problems. He investigates various strategies to provide countries with an incentive to accede, agree, and comply to an international environmental agreement. He shows that by integrating real-world restrictions into a model, game theory becomes a powerful tool for explaining the divergence between first-best policy recommendations and second-best designs of actual agreements. He suggests that small coalitions might be more stable and accomplish more than a single, overarching agreement. Annotation copyrighted by Book News Inc., Portland, OR